USDA issuing $1.8 billion in CRP payments

USDA has begun making $1.8 billion in Conservation Reserve Program rental payments to farmers who have voluntarily enrolled land in the nation’s largest conservation and wildlife habitat stewardship program.

The payments, which USDA began issuing Oct. 1, will be made in the new 2008 fiscal year for conservation practices completed in 2006 and 2007, according to acting Agriculture Secretary Chuck Conner.

“By participating in CRP, producers and other landowners throughout the nation are improving air and water quality, enhancing wildlife habitat and reducing erosion,” said Conner, named to succeed former Agriculture Secretary Mike Johanns last month. “These practices are making a real difference today.”

Currently, farmers hold 782,000 CRP contracts on 441,000 farms. The number of contracts is higher than the number of farms because some producers may have multiple contracts on a single farm.

Conner said growers will receive an average $49.49 per acre in rental payments. The payments total about $4,130 per farm because of the large number of smaller farming operations enrolled in the program.

The program includes 355,000 contracts on 3.9 million acres for CRP’s continuous sign-up and 427,000 contracts on 32.9 million acres for general or annual sign-up. Under continuous sign-up, producers may enroll high priority conservation practices such as filter strips and riparian buffers at any time without competition.

Contracts for 2 million acres enrolled in the program expired Sept. 30 and will not be renewed. Conner cited those acres in an announcement in which he said he would not offer penalty-free early releases from CRP contracts.

Some grain and livestock organizations had been calling on USDA to allow land to be taken out of CRP after corn, soybean and wheat prices rose to unusually high levels earlier this year. In recent weeks, wheat and soybean futures have moved above $9 and $10 per bushel.

“Wheat, soybean and corn markets are providing very strong incentives to plant more acreage this fall and next spring,” said Conner. “Throughout this year, the market focused on attracting corn acres, and, to a lesser extent, wheat acres. Producers responded strongly, with corn acres increasing to their highest level since 1944.”

Wheat prices, meanwhile, have risen to historically high levels and are expected to cause more acres to be shifted to the crop in the United States and around the world. “Overall, I expect that market signals will continue to provide adequate acres, recognizing that strong competition among crops is likely.”

Conner’s decision drew praise from conservation groups such as Ducks Unlimited and from farm organizations such as the American Corn Growers Association, which has 14,000 members in 35 states.

“We are thrilled Secretary Conner has affirmed the administration’s support for conservation by not allowing these early releases from CRP contracts,” said Don Young, Ducks Unlimited executive vice president. “This will keep more habitat on the ground for waterfowl, as well as provide economic and soil and water quality benefits for farmers and ranchers.”

“Current USDA projections for next year’s corn crop and carryover shows there will be more than sufficient production to cover all needs,” said ACGA President Keith Bolin. “Jeopardizing highly erodible land by taking it out of the reserve just so that the integrated livestock factory farms can go back to buying cheap corn as they have for the past decade is unacceptable.”

ACGA has been urging USDA officials to “stay the course on CRP” and suggested an administrative action to allow farmers to exit the program early was shortsighted and ill-advised.

“The Department of Agriculture heeded our call and made the best decision,” said Bolin. “We were concerned the CRP’s continuation was at risk due to budgetary pressures as well as those in the agribusiness sector who want more corn planted next year in order to suppress corn prices.”

The CRP was established in 1985 as a voluntary program that allows farmers to retire highly erodible land from production and also ensure a secure income during times of low commodity prices. Currently, enrollment in the CRP stands at 36.8 million acres.

Producers enroll in CRP and plant long-term, resource-conserving covers to improve water quality, control soil erosion and enhance habitats for waterfowl and wildlife. In return, USDA provides producers with rental payments. CRP contract duration is from 10 to 15 years.

USDA issues other CRP payments throughout the year. These payments include a 50 percent expense reimbursement for establishing cover as well as incentive payments for enrolling eligible high priority conservation practices.